Further positive results in extensive trial of DNANet anti-theft product in London

72% growth in staff and threefold expansion of plant position company for high-volume delivery

Progress in Small Business Innovation Research (SBIR) project with Missile Defense Agency

Financial Results

For the three months ended June 30, 2013, APDN generated $644,842 in revenues from operations, an increase of $116,268, or 22%, from revenue of $528,574 for the three months ended June 30, 2012. Revenues for the three months ended June 30, 2013 were principally from the sales of authentication services. The increase in sales for the three months ended June 30, 2013 compared to the three months ended June 30, 2012 was primarily caused by the increase in DNA-marking contracts with commercial electronics manufacturers and represents the company's highest quarterly revenues to date.

"This quarter, APDN signed eight contracts related to Federal Supply Class (FSC) 5962, doubling the cumulative contracts that had been signed by the previous quarter," stated Dr. James A. Hayward, President and CEO of Applied DNA Sciences. "We anticipate that this trend will continue, judging from the increasing number of inquiries and companies in various stages of negotiation. Our other product markets continue to contribute to our revenues."

Selling, general and administrative (SG&A) expenses increased from $1,752,501for the three months ended June 30, 2012 to $3,240,815 for the three months ended June 30, 2013. The increase of $1,488,314, or 84.9%, is primarily attributable to higher professional fees specifically for legal and consulting and increased salary due to the increased headcount. The increase is also due to expenses incurred for the relocation of our corporate office during the three months ended June 30, 2013. Included in SG&A for the three months ended June 30, 2013 is approximately $956,000 of non-cash charges, including $886,000 for stock based compensation expense primarily related to the vesting and modification of employee stock options and $70,000 of bad debt expense.

"SG&A expenses will stabilize going forward," Dr. Hayward continued. "We have completed the move into our new facility, our management team is strong and experienced and we are positioned to deliver against high demand while continuing necessary product development without additional major expenditures."

Research and development expenses increased from $99,958 for the three months ended June 30, 2012 to $184,981 for the three months ended June 30, 2013. The increase of $85,023 or 85.1% is attributable to additional research and development to extend our patent portfolio and to capitalize on emerging market requests.

Net loss for the three months ended June 30, 2013 increased to $2,135,612 from a net loss of $1,429,645 for the three months ended June 30, 2012 which is primarily attributable to factors described above.

Military Electronics

Dr. Hayward commenting further on the effort in military electronics, pointed out that "the companies signed or in stages of negotiation include manufacturers, authorized distributors, and prime contractors. We believe the company, along with the Defense Logistics Agency, is building a platform on which both private and public sectors can leverage and take immediate, practical steps against counterfeits. The electronics industry is vast and varied, but our product is simple, doable, and tested."

The company also reported favorably on its high profile in the area of new government regulations requiring defense suppliers to build anti-counterfeiting systems. APDN team members have presented at scores of conferences, led a major industry workshop this quarter, and delivered formal comments at hearings in Washington D.C. and in written form, all as thought leaders on anti-counterfeiting in electronics. Coverage of the company in trade and mass media has been extensive.

Company officials also pointed out that, nearing the milestone of a half-million SigNature DNA-marked electronic components in circulation, the company is in a position to capitalize by offering a broader set of authentication programs in the supply chains impacted. We expect that channel selling will bring new customers and increase sales.

Distribution Network

In the last quarter we have expanded our Distribution network to increase sales of our off-the-shelf products such as the Sentry DNA spray system. This action has shown additional sales revenue at minimal operational costs. We now have distributors in Sweden, Italy, Australia, New Zealand, North America, Greece and the Middle East, with plans for further expansion.

Missile Defense Agency SBIR ContractCompany officials judge our progress against the specific tasks of our contract with the Missile Defense Agency (MDA) to be ahead of schedule. For example, execution against the company's technology roadmap has led to increases in scale needed to penetrate industry sectors from independent distributors, to authorized distributors, to component manufacturers and prime contractors. The company expects corresponding increments in scale for printing and marking methodologies to be relevant to multiple industries and federal agencies.

London DNANet® deployment

APDN is engaged with the London Metropolitan Police Service (MPS), deploying its DNANet product against home burglaries in two of the city's high-crime areas, Southwark and Lambeth. Results have been very favorable, including in districts adjacent to the target neighborhoods, showing that crime has not been merely displaced, but deterred.

Patent portfolio

APDN continues to build its patent portfolio, an essential asset for our shareholders, critical in a biotech company, and the basis of competitive edge. APDN regards our patent strategy as a fundamental component of our value creation. Two patent applications were filed in the quarter and four granted.

Management team

APDN continued to expand and solidify its management team in the quarter, adding talent in information technology and human resources.

APDN currently has 44 full-time employees and 4 part-time employees, including 3 in management, 34 in operations, 9 in sales and marketing, 1 in human resources, and 1 in investor relations.

Dr. Hayward commented: "We have a diverse, well educated and experienced workforce. We are poised to take the company to the next level through expansion to new stakeholders in our core markets, as well as tailoring our proven solutions for emerging markets. We continue to grow our management team aiming for world-class expertise. The enhanced team will support a market launch in the Fall of 2013 of an Authentication Channel Program that will accelerate momentum in electronics marking with SigNature DNA. In parallel, new marking and reading technologies will broaden accessibility to product security information in emerging markets such as pharmaceutical track-and-trace, print media and textiles."

Form 10-Q Availability

The quarterly report on Form 10-Q, which includes Applied DNA Sciences consolidated financial statements, is available for viewing and downloading, free of charge, through the Investor Relations section of APDN's Web site at www.adnas.com, or through the SEC's electronic data system at www.sec.gov.

About Applied DNA Sciences

APDN is a provider of botanical-DNA based security and authentication solutions that can help protect products, brands and intellectual property of companies, governments and consumers from theft, counterfeiting, fraud and diversion. SigNature® DNA and smartDNA, our principal anti-counterfeiting and product authentication solutions that essentially cannot be copied, provide a forensic chain of evidence and can be used to prosecute perpetrators.

The statements made by APDN may be forward-looking in nature. Forward-looking statements describe APDN's future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of APDN. Actual results could differ materially from those projected due to our short operating history, limited financial resources, limited market acceptance, market competition and various other factors detailed from time to time in APDN's SEC reports and filings, including our Annual Report on Form 10-K, filed on December 20, 2012 and our subsequent quarterly reports on Form 10-Q. APDN undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date hereof to reflect the occurrence of unanticipated events.